China Rises in the Wake of Crude Futures Contract

Published By : 05 Oct 2015 | Published By : QYRESEARCH

With its denomination of crude futures contract, China seeks an assertion on global oil markets. It is expected to be launched by the end of this year. 

In the meantime, worldwide market analysts notify that China, the second-leading oil consumer after the U.S., it will have a struggling journey in the coming years. It will fight to mark its notch as an established region among the leading benchmarks WTI and Brent.  

China is so far the world’s largest oil importer and further plans to become the largest oil consumer in the coming years. It is thus evitable that the country will be the place for the next oil future in Asia, said the director at Energy Economics Research Center. 

The country’s consumption is expected to exceed the US by 2034, says the US EIA. China produced nearly 4.6 mn barrels/day of oil last year, while the country’s average net imports hit 6.1 mn barrels/day.  

Asia’s influence is growing rapidly on China, especially in the international commodity markets. China’s main focus is to have these commodity markets priced on its own exchanges. They also want to be consistent with the country’s moves towards greater internationalism in terms of currency.    

SIE is working on its final draft to improve the securities regulatory commission in china before the mock trading exercise. The official launch is expected before the end of this year. The initial target seems local firms and foreign companies with large interests in the country albeit the open trading to global players.    

The oil sector in china would be dominated by the country’s national oil companies and private companies that have emerged, but their scope remains limited. The market adoption should not be a major hurdle. Moreover, volumes on the exchange could grow quickly due to the retail investments, said VTB Capital global head of commodities research.

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